Oklahoma Legislature reaches deal on school funding, teacher pay and tax credits

Negotiations on public school funding and private education tax credits that have consumed the Oklahoma Legislature for months have finally ended in a deal.

Lawmakers agreed to pour $625 million into public education. The package funnels an extra $500 million into the education funding formula, the state’s chief driver of public school support, and $125 million for Redbud grants, which aid school facilities.

Of the formula funding, $286 million will support teacher pay raises, ranging from $3,000 to $6,000 based on the educator’s years of experience. School districts will be able to choose how they use remaining formula dollars.

A $155 million tax credit plan, which will grow to $255 million by 2026, also will advance.

The final stretch: Expect the unexpected in the final two weeks of Oklahoma's legislative session

Families with children in private K-12 schools would receive refundable tax credits ranging from $5,000 to $7,500 per student, depending on household income, to offset costs of schooling. Home-school families would qualify for a $1,000 refundable tax credit per child.

The overall package also included $12 million for teacher maternity leave, $150 million over three years for school resource officers and $10 million over three years to hire reading instructors.

Talks between the House and Senate were fraught for months as neither side could reconcile its priorities. Negotiations advanced rapidly over the past week with former Oklahoma Supreme Court Chief Justice Steven Taylor mediating discussions.

The Senate's top lawmaker, Pro Tem Greg Treat, said Taylor was a "godsend" as legislators hammered out final details until they reached a final agreement Monday morning.

House Speaker Charles McCall, R-Atoka, said he isn't surprised a deal took this long to materialize. Legislative leaders had not agreed before the session on details of an education funding bill.

"There's something in the package that everybody likes," McCall told The Oklahoman. "The color of the wrapping paper is subjective by everybody, but you can't let a good package not move forward just because nobody agrees that it's perfect."

Previously: The Oklahoma House is using school tax credits as a bargaining chip. What are the terms?

How much would Oklahoma families get in tax credits?

The tax-credit plan remained unchanged since a final version passed the House two weeks ago. McCall used a little-known procedural move to "capture" House Bill 1934 to prevent the measure from advancing to the governor's desk until lawmakers sorted out public school funding.

Although the tax credit idea originated in the House, the final language aligned with the Senate's version, which added more controls for household earnings. While home-school families would receive $1,000 per child regardless of income, those with children in private school would qualify as follows:

• $7,500 per student in households earning under $75,000 annually

• $7,000 per student in households earning between $75,000-$150,000 annually

• $6,500 per student in households earning between $150,000-$225,000 annually

• $6,000 per student in households earning between $225,000-$250,000 annually

• $5,000 per student in households earning over $250,000 annually

Families could apply the tax credits to the cost of school tuition and fees, tutoring, textbooks and other instructional materials, and fees for standardized tests. Recipients would have to submit receipts as proof of their educational costs.

The state will set a maximum budget of $150 million for private-school tax credits in 2024 and will raise the cap to $250 million by 2026. Households earning $150,000 and below would get first preference in the program. The maximum for the home-school tax credits would remain at $5 million.

The concept drew opposition from Democrats, who criticized it as repackaged private school vouchers.

"Tying education funding to an unpopular voucher scheme is not the solution Oklahoma families are looking for," said Senate Minority Leader Kay Floyd, D-Oklahoma City. "Our kids need individualized attention from their teachers, guaranteed breakfast and lunch, and support when they are going through hard times. This proposal does not meet those needs."

An expansion of school choice was a major priority of Gov. Kevin Stitt. Although he initially called for legislation to grow private-school vouchers, the governor has advocated for the tax-credit plan since it surfaced in the House early this session.

"The tax credit piece is for kids that maybe aren't thriving in whatever ZIP code school that they're in," Stitt said. "Every single parent is now going to have the ability to get a tax credit."

More: Oklahoma families may get a $5K tax credit for private schools. How much would it help?

Oklahoma teacher pay increases depend on years of experience

All certified staff working in public schools — including teachers, school counselors, speech pathologists and library media specialists — are expected to receive a raise, and for the first time, the state will offer paid maternity leave for teachers.

Pay increases, which will take effect next school year, will be based on the number of years the certified educator has worked in Oklahoma schools:

• $3,000 for educators with zero to four years of experience

• $4,000 for educators with five to nine years of experience

• $5,000 for educators with 10 to 15 years of experience

• $6,000 for educators 15 years or more of experience

Lawmakers will budget about $12 million to give teachers six weeks of maternity leave, Treat said.

As neighboring states raise their levels of teacher pay, Oklahoma needed to produce a pay increase of its own to remain competitive, McCall said.

The speaker said a salary increase for teachers was "always going to happen," no matter what happened with the rest of the education deal.

"It was even contemplated that if we were at an impasse that we probably would just do a teacher pay raise until we could get the rest of it figured out," McCall said. "I would want educators in the state to look at what's come out of this package and know there was never any question about their value or whether or not a teacher pay raise was going to happen."

School funding brings negotiations down to the wire

With the tax credit agreement nailed down, Republican lawmakers continued to debate over the structure of school funding boosts.

House lawmakers eventually relented on their Oklahoma Student Fund, which would have dedicated $300 million to schools, with a $2 million cap on how much each district could receive. The idea was a non-starter in the Senate, Treat said, because it would give a larger proportional benefit to rural schools over urban and suburban districts.

The final package left out the student fund concept, instead directing extra funds through the state's typical mechanism, the funding formula.

McCall said a deal might have been reached much sooner had the Senate voted on a package with the student fund, but he said the final edition of the deal is a "win."

House and Senate lawmakers could begin casting votes as soon as Tuesday on legislation to codify the agreement. Next comes the rest of the budget process, with impending debates over tax cuts, economic development, and hospital and nursing home funding, among other priorities.

Reaching Monday's agreement marked a "great day for public education in Oklahoma," said Shawn Hime, executive director of the Oklahoma State School Boards Association.

Hime estimated the package will provide schools with nearly $1,000 more per student.

"We appreciate the hard work and commitment of our elected state leaders in crafting a bold, historic budget agreement that will be transformational for Oklahoma’s students and their futures," Hime said.

Editor's note: This story has been updated to correct the total cost of the certified staff pay raise. It is expected to cost $286 million.

Reporter Nuria Martinez-Keel covers K-12 and higher education throughout the state of Oklahoma. Have a story idea for Nuria? She can be reached at nmartinez-keel@oklahoman.com or on Twitter at @NuriaMKeel. Support Nuria’s work and that of other Oklahoman journalists by purchasing a digital subscription today at subscribe.oklahoman.com.

This article originally appeared on Oklahoman: Oklahoma Legislature reaches deal on teacher raises, tax credits